N.H. House resurrects Internet access tax ban

A week after it killed it, the House resurrected a bill Wednesday that would ban taxing Internet access in New Hampshire.

The House voted 245-80 Wednesday to add the tax ban to a Senate bill on dredging. The House also added an appropriation for $1.5 million to provide services to the disabled.

Opponents of the tax ban said the state could not afford the loss of revenue, estimated at $6 million annually. But supporters said New Hampshire should not tax Internet access.

The Senate next considers whether to try to negotiate a compromise.

Last week, the House killed a bill passed by the Senate containing the tax ban, because the Senate had refused to accept another section of the bill passed by the House that put $16 million in surplus from the fiscal year that ended June 30 into the state's savings account. The Senate said the state faced too many uncertainties to earmark the money for savings.

Both chambers said the tax ban was to end confusion causing some companies to pay the tax while others do not.

Witnesses representing Verizon, Comcast and the New England Cable and Telecommunications Association testified in support of the legislation at a Senate hearing last month.

Revenue Commissioner Kevin Clougherty insisted in a letter to the Senate that New Hampshire has not and does not tax the Internet. He said it is up to the telecommunications companies to separate taxable two-way voice and text communications from bundled charges that include access and data fees to avoid being taxed on the total charge.

State law currently does not define Internet access. It was written before the Internet was widely used and before the invention of wireless networks, which allow access to the Internet over smartphones.

The bill would modify a 1990 law by prohibiting taxing the charges consumers pay to gain access to the Internet through broadband and wireless connections. The tax is charged on two-way phone use, other voice communications and text messaging, as well as on bundled charges when companies don't break out two-way voice and text communications.

The House also added measures to the bill that could pose hurdles to its acceptance by the Senate. One would increase the threshold amounts for taxation for business taxpayers to file with the state, and another would require business tax form changes proposed by revenue officials to undergo a review by a legislative committee. The Senate opposes both of those proposals.